Department of Business Management
Human Resource Management
Ing. Miloš Krejčí
milos.krejci@mail.vsfs.cz
Human Resource Management
1. Introduction to Human Resource Management
2. Personnel Planning and Recruiting - Job Analysis,
Descriptions and Specifications
3. Employee / Employer Selection and Interviewing
Process
4. Training and Developing Employees
5. Performance Management and Appraisal
6. Coaching, Careers and Talent Management
7. Compensation planning
8. Financial Incentives and Employee Benefits
9. Ethics, Culture, Organizational Change and Fair
Treatment in HR Management
10. Equal Opportunity and Diversity, Labor Relations,
Employee Safety and Health
11. Managing Human Resources in Global and SME
companies
Human Resource Management [NA_HRM]
2.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Motivation, Performance, and Pay
Incentives
Financial rewards paid to workers whose production
exceeds a predetermined standard.
Frederick Taylor
Popularized scientific management and the use of
financial incentives in the late 1800s.
Systematic soldiering
Fair day’s work
Linking Pay and Performance
Understanding the motivational bases of incentive
plans
Human Resource Management [NA_HRM]
3.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
The Hierarchy of Needs
Maslow’s Hierarchy of Needs:
Physiological (food, water, warmth)
Security (a secure income, knowing one has a job)
Social (friendships and camaraderie)
Self-esteem (respect)
Self-actualization (becoming a whole person)
Maslow’s prepotency process principle:
People are motivated first to satisfy each lower-order
need and then, in sequence, each of the higher-level
needs.
[Abraham Maslow]
Human Resource Management [NA_HRM]
4.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Herzberg’s Hygiene–Motivator Theory
Hygienes (extrinsic job factors)
Satisfy lower-level needs
Inadequate working conditions, salary, and incentive
pay can cause dissatisfaction and prevent satisfaction.
Motivators (intrinsic job factors)
Satisfy higher-level needs
Job enrichment (challenging job, feedback, and
recognition) addresses higher-level (achievement, selfactualization) needs.
Premise:
The best way to motivate someone is to organize the
job so that doing it provides feedback and challenge
that helps satisfy the person’s higher-level needs.
Human Resource Management [NA_HRM]
[Frederick Herzberg]5.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Herzberg’s Hygiene–Motivator Theory
Relying exclusively on financial incentives is risky.
The employer should also provide the recognition and
challenging work that most people desire.
Human Resource Management [NA_HRM]
6.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Incentive Pay Terminology
Pay-for-Performance Plan
Ties employee’s pay to the employee’s performance
Variable Pay Plan
Is an incentive plan that ties a group or team’s pay to
some measure of the firm’s (or the facility’s) overall
profitability
Example: profit-sharing plans
May include incentive plans for individual employees
Human Resource Management [NA_HRM]
7.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Types of Employee Incentive Plans
Individual Employee Incentive
and Recognition Programs
Sales Compensation
Programs
Pay-for-Performance
Plans
Human Resource Management [NA_HRM]
Team/Group-based
Variable Pay Programs
Organizationwide Incentive
Programs
Executive Incentive
Compensation Programs
8.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Individual Incentive Plans
Piecework Plans
The worker is paid a sum (―piece rate‖) for each unit he or she
produces.
• Straight piecework
• Standard hour plan
Merit Pay
Is a permanent cumulative salary increase the firm awards to an
individual employee based on his or her individual performance
Becomes permanent ongoing reward for past performance
Merit Pay Options
Give annual lump-sum merit raises that do not make the raise part
of an employee’s base salary.
Tie merit awards to both individual and organizational
performance.
Human Resource Management [NA_HRM]
9.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Incentives for Professional Employees
Professional Employees
Are those whose work involves the application
of learned knowledge to the solution of the employer’s
problems.
Lawyers, doctors, economists, and engineers
Possible Incentives
Bonuses, stock options and grants, profit sharing
Better vacations, more flexible work hours
Improved pension plans
Equipment for home offices
Human Resource Management [NA_HRM]
10.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Non-financial and Recognition Awards
Effects of Recognition-Based Awards
Recognition has a positive impact on performance,
either alone or in conjunction with financial rewards.
Day-to-day recognition from supervisors, peers, and
team members is important.
Ways to Use Recognition
Social recognition
Performance-based recognition
Performance feedback
Human Resource Management [NA_HRM]
11.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Incentives for Salespeople
Salary Plan
Straight salaries
Best for: prospecting (finding new clients),
account servicing, training customer’s sales force,
or participating in national and local trade shows
Commission Plan
Pay is a percentage of sales results.
Keeps sales costs proportionate to sales revenues
May cause a neglect of nonselling duties
Can create wide variation in salesperson’s income
Likelihood of sales success may be linked to
external factors rather than to salesperson’s
performance
Human Resource Management [NA_HRM]
12.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Incentives for Salespeople
Combination Plan
Pay is a combination of salary and commissions,
usually with a sizable
salary component.
Plan gives salespeople a floor
(safety net) to their earnings.
Salary component covers company-specified service
activities.
Plans tend to become complicated,
and misunderstandings can result.
Human Resource Management [NA_HRM]
13.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Incentives for Managers and Executives
Executive Total Reward Package
Base salary
Short-term incentives
•
Bonuses – annually, quarterly …
Long-term incentives
•
Stock options
•
Performance shares
Human Resource Management [NA_HRM]
14.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Executive Compensation Plan
1. Define the strategic context for the executive
compensation program.
2. Shape each component of the package to focus
the manager on achieving the firm’s strategic goals.
3. Check the executive compensation plan for compliance
with all legal and regulatory requirements and for tax
effectiveness.
4. Install a process for reviewing and evaluating
the executive compensation plan whenever
a major business change occurs.
Human Resource Management [NA_HRM]
15.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Team/Group Incentive Plans
Team (or Group) Incentive Plans
Incentives are based on team’s performance.
How to Design Team Incentives
Set individual work standards.
Set work standards for each team member
and then calculate each member’s output.
Members are paid based on one of three formulas:
• All receive the same pay earned by the highest producer
• All receive the same pay earned by the lowest producer
• All receive the same pay equal to the average pay
earned by the group.
Human Resource Management [NA_HRM]
16.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Organization-wide Incentive Plans
Profit-Sharing Plans
Current profit-sharing (cash) plans
Employees receive cash shares of the firm’s profits
at regular intervals.
Employee Stock Ownership Plan (ESOP)
A firm annually contributes its own stock—or cash (with
a limit of 15% of compensation) to be used to purchase
the stock—to a trust established for the employees.
The trust holds the stock in individual employee
accounts and distributes it to employees upon
separation from the firm if the employee has worked
long enough to earn ownership of the stock.
Human Resource Management [NA_HRM]
17.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Advantages of ESOPs
For the Company
Can take a tax deduction equal to the fair market value
of the shares transferred to the ESOP trustee
Gets an income tax deduction for dividends paid
on ESOP-owned stock
Can borrow against ESOP in trust and then repay
the loan in pretax rather than after-tax dollars
For the Employees
Develop a sense of ownership and commitment
Do not pay taxes on ESOP earnings until they receive
a distribution.
For the Shareholders of Closely-Held Corporations
Can place assets into an ESOP trust which will allow
them to purchase other marketable securities to
diversify their holdings
Human Resource Management [NA_HRM]
18.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Why Incentive Plans Fail
Performance pay can’t replace good management.
You get what you pay for.
―Pay is not a motivator.‖
Rewards punish.
Rewards rupture relationships.
Rewards can have unintended consequences.
Rewards may undermine responsiveness.
Rewards undermine intrinsic motivation.
Human Resource Management [NA_HRM]
19.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Emploee Benefits
Types of Employee Benefits
Supplemental
pay
Human Resource Management [NA_HRM]
Insurance
benefits
Retirement
benefits
Executive
services
20.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Employer Benefits Costs by Category
Human Resource Management [NA_HRM]
21.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Policy Issues in Designing Benefit Packages
Which benefits to offer
Who will be covered
Whether to include
retirees
Coverage during
probation
Policy Issues
How to finance benefits
Degree of employee
choice
Cost containment
procedures
Communicating
benefits options
Human Resource Management [NA_HRM]
22.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Pay For Time Not Worked
Vacations and
holidays
Unemployment
insurance
Sick leave
Severance pay
Human Resource Management [NA_HRM]
Supplemental
Pay Benefits
Parental leave
Supplemental
unemployment
benefits
23.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Trends in Health Care Cost Controls
Premiums and co-pays
Communication and
empowerment
Cost-Control
Trends
Human Resource Management [NA_HRM]
Wellness programs
Health savings accounts
Claim audits
24.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Other Benefits Issues
Long-Term Care
Insurance for older workers is a growing issue.
Life Insurance
Types
Group life insurance
Accidental death and dismemberment
Personnel policy considerations
Benefits-paid schedule
Supplemental benefits
Financing (employee contribution)
Benefits for Part-Time and Contingent Workers
Leave and health benefits available to part-time
workers.
Benefits for long-term independent contractors.
Human Resource Management [NA_HRM]
25.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Retirement Benefits
Types of Pension Plans
Defined
benefit
plans
Defined
contribution
plans
Qualified
plans
Nonqualified
plans
Pension plans are financial programs that provide income to
individuals in their retirement. We can classify pension plans in three
ways: contributory versus noncontributory plans, qualified versus
nonqualified plans, and defined contribution versus defined benefit
plans. Plan details are based on each country law.
Human Resource Management [NA_HRM]
26.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Family-Friendly (Work–Life) Benefits
Subsidized child care
Sick child benefits
Elder care
Time off
Subsidized employee transportation
Food services
Educational subsidies
Fitness and medical facilities
Flexible work scheduling
Human Resource Management [NA_HRM]
27.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Flexible Benefits Programs
Cafeteria (Flexible Benefits) Approach
Each employee is given a limited benefits fund budget
to spend on preferred benefits.
Types of plans
Flexible spending accounts
Core plus option plans
Employee Leasing
Professional employer organizations or staff leasing
firms
Handle human resources functions for leased
employees of small firms
Can provide benefits by aggregating employees into
larger insurable groups
Can raise worker commitment, co-employment, and
workers’ compensation issues
Human Resource Management [NA_HRM]
28.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Flexible Work Schedules
Flextime
Compressed workweek schedules
Workplace flexibility
Job sharing
Work sharing
Human Resource Management [NA_HRM]
29.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Key Terms
financial incentives
Expectancy
variable pay
standard hour plan
annual bonus
stock option
golden parachutes
team (or group) incentive plan
profit-sharing plan
employee stock ownership plan
(ESOP)
Human Resource Management [NA_HRM]
30.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
Key Terms
benefits
profit-sharing plan
supplemental pay benefits
employee stock ownership plan (ESOP)
stock option
golden parachutes
team (or group) incentive plan
unemployment insurance
sick leave
supplemental unemployment
benefits
early retirement
workers’ compensation
family-friendly (or work–life) benefits
group life insurance
flexible benefits plan/cafeteria benefits plan
Social Security
compressed workweek
pension plans
workplace flexibility
financial incentives
Expectancy
variable pay
annual bonus
job sharing
Human Resource Management [NA_HRM]
work sharing
31.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz
LEARNING OUTCOMES
1. Explain how you would apply five motivation theories in
formulating an incentive plan.
2. Discuss the main incentives for individual employees.
3. Discuss the pros and cons of commissions versus
straight pay incentives for salespeople.
4. Describe the main incentives for managers and
executives.
5. Name and define the most popular organization wide
variable pay plans.
6. Outline the steps in designing effective incentive plans.
Human Resource Management [NA_HRM]
32.
Ing. Miloš Krejčí milos.krejci@mail.vsfs.cz